The cotton trading was denied the pace due to buyers/sellers attitude to see abrupt turn in their favour which never came their way.
The two-way curbs drove cotton prices down as spot rate was reduced by Rs 25 to Rs 2925 without ST and upcountry expenses. Spot rate was reduced on Saturday by Rs 25 to Rs 2900.
WORLD SCENARIO: Futures in cotton trading in New York trading sustained sharp losses due to several factors including fund, trade and option related settings and speculation of planting date.
The opening day futures ended slightly higher on modest buying as players braced for the release of a vital govt report soon. A survey of market participants showed they expect US farmers to plant and average of 13.502 million acres.
Second day's trading finished softer on modest speculative sales, as wait for cotton plantings report kept them away from market. "Everybody is marking time until the report goes out."
The speculators who nudged cotton higher on Monday were the main sellers as they lightened up on their position ahead of planting report.
Futures weakened on Wednesday after a stiff bout of fund and trade selling in the wake of surprisingly big US planting intentions, USDA forecast cotton plantings this year at a larger than expected 14.402 million acres, sharply higher than trade expectations for 13.50 million acres.
Many in trade had been expecting in low number, with the searing rally in soyabean and cotton futures in Chicago supposed to have taken acres away from cotton.
On Thursday futures settled near a 2-month low on fund, trade and option related selling. Analysts saw several market merchants and players were active in the options ring as they sought to secure protection from falls in cotton futures.
Meanwhile, USDA said net upland cotton futures. Meanwhile, USDA said net upland cotton sales hit 207,300 RBs. Shipments hit a marketing year peak of 395,900 RBs.
LOCAL TRADING: The daily cotton trading pattern and yields on the market is becoming vague every day.
According to brokers the sales are generally kept back and if at all on or two deals are passed on the quarters they are late in the night.
However, total breakdown was not seen as sales flow continued to keep mills running. When the spinners return is a different matter but it is a fact they need cotton and need local cotton. Prices are still more favourable in Pakistan them in other producer countries.
However, the first day saw some 8000 bales changing hand and spot rate remaining at Rs 2950. A couple of deals were marked held on the second day.
The brokers divulged into way the trading was going on. They were of the opinion that daily change of hand is around 15000 bales, which are not reported. Even on Thursday spot rate was changed. It was held at Rs 2950, per maund.
The trading was dull. It is not possible today with certainly if any deal was held. But it seemed today's deals were low or nil.
The only deal DMR had reported was done on Wednesday. The spot rate having slashed it was expected phones were likely to wake up with information seekers and buyers.
However, only a couple of deals were reported on Friday. The spot rate was unchanged at Rs 2925 while asking prices had come down to Rs 2400 and Rs 2550, at which spinners were entertaining deals.
SATURDAY'S: Today's feature was reduction in spot rate by Rs 25 to Rs 2900, but brokers reported nil business today. The trading is likely to maintain low profile as spinners have been planning to import at declining rates in the world.
AVOIDING CUT THROAT BID: How far China is getting favours of countries it was approaching to come to terms so that major textile exporters like China, India and Pakistan adopt cut-throat exercises at the advent of the WTO regime, knocking at the door.
How experienced textile manufacturers are taking China on face value is nobody is ready to say. But the fact remains that Chinese teams have frequently visits in last one year trying to impress that it will be worst day if Pakistan, China, India and other nations instead of jointly formality a marketing strategy, go all alone.
What the Chinese have been selling is the idea that when world trade pattern will be free-for-all profits could go down and even loss could be sustained by the competitors.
Whether Chinese have been able to impress on major textile exporters to the effect is not clear. But to facilitate the process Chinese textile exports have openly called for joint ventures.
In its latest visit (date not specified) team leader has said that China is ready to shake hands from all textile exporters world wide to face what he said global challenges after enforcement of WTO regulations in 2005.
In Pakistan also the current textile exporters reiterated cell for joint ventures in spinning, weaving and processing.
Unfortunately such statements do appear that Pak products face tough competition in the world markets due to several reasons.
The Chinese offer is a boon which Pakistan and other countries in the region should head so that not to indulge in unprofitable competition.
Some months remain for a decision. It is hoped Chinese helping hand should be held to save from losses.
HEDGE TRADING: Much ado was being heard about hedge trading in cotton. It appeared it would be a fact of matter this season - 2004,05.
Earlier also was seen much dust in the air which would settle down without anybody shedding any tears.
The opposition to futures trading in cotton was, and why it led to its closure, in 70's, due to people holding view that it was not Islamic. But hectic efforts by KCA men it was taken to Muslim scholars and experts who cleared it as not being non-Islamic. But it was not clear whether futures in cotton will at all begin.
At the first place two parties emerged as claimants to carry out the hedge business in cotton - the KCA who claims all the possible wherewithal and National Commodity Exchange Limited (NCEL).
In the meantime, what led to ginners who blasted the idea about hedge in cotton saying they are opposed to it and opened freshly the issue being non-Islamic.
However, it is better some solution is found, when future trading in yarn was up in the air.
The Aptma which looks after the matter squarely, has come out opposing strongly why NCEL necessarily.
They were vexed at simply being ignored though the issue concerned them Aptma opposition was on ground that yarn futures it at all has he started should it be given to experts who understands yarn and implication and other expertise at their command. Both the above issues are easy to be resolved.
So far both appear difficult to start operation quickly. But authorities and stakeholders could sit together, remove misunderstanding and clear the way for lingering issues to nip in the bud.
TAIL PIECE: A Chinese delegation on a visit to Pakistan showed interest in 'Textile City' being planned in this country.
The Chinese were trying quite sometime to involve Pakistan textile millers and textile exporters to start joint ventures. Now they have a place where they can set up a spinning mill.
Later they planned go for weaving units. Even the current team has assured Pak manufacturers and exporters they do not want to complete with them but share with them instead.
In Textile City Chinese textile manufactures are likely to make a place for themselves. Their arrival will welcome and will be watched how they benefit Pak manufacturers and the country?
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